Market insight

Today’s post comes from Jonathan Reeve, Wine Owners’ newest team member. Jonathan joined us in January, after eight busy years at Wine-Searcher.com. You can reach him, if you feel so inclined, at Wine Owners HQ: +44 (0)2072784377

Yes ladies and gentlemen, V-day is imminent, but no we are not going to feed you a regurgitated list of the ‘best Valentines wines to buy for your loved one’. We are instead devoting this post to a quick look at Passion Assets. Topical and actually interesting. And profitable.

They’re big news, and we’re hearing about them more and more. They’re becoming more…well, passionable. So what are passion assets? And why is wine the best passion asset?

Quick definition: Passion assets are essentially high-value luxury products such as fine wine, vintage watches, classic cars and antiques, which can be invested in for profit. Although originally created for some practical or aesthetic function, over time these products acquire a purely abstract financial value, born of a shared appreciation among the collective group of x lovers (wine lovers, watch lovers, car lovers etc.).

Passion assets are purchased initially because they have an emotional attachment, and are attractive in some way; they’re beautiful to taste, hold or look at. But because their value is simultaneously concrete and abstract, they are both a good store of wealth and a profitable investment. In truth, their investment performance is almost a coincidence. But what a beautiful coincidence that is. And there’s your answer; that’s why they’re quite so popular;

Since 2008 interest in tangible assets has grown massively. Rock-bottom interest rates and fears of market volatility have led investors to switch to investments which they can actually hold or touch, whose reality is more than just zeros and ones of stock market computer code. And what do those investors turn to when selecting these tangible assets? Things that they’re passionate about. Passion assets. Wine tops the list.

“Wine is the best passion asset.” Well, I would say that – I have wine passion. But genuinely, I mean it. I also have watch passion, and car passion, but I don’t invest in either of those. Investment wines may well be the only passion asset whose investment value begins from day one. Cars don’t become classics, watches don’t become ‘vintage’, and antiques don’t become antique until years after the initial purchase. Top-end investment wines, however, begin acquiring value from day one, as they leave the winery forecourt. If only cars did that…

It isn’t just me saying all this, either. Knight Frank say it too. Their Wealth Report 2017 confirmed wine as the world’s best-performing passion asset. Have a look at the Knight Frank Fine Wine Icons Index.

And here’s another reason. Which other passion asset gives you the opportunity to create such a diverse, romantic collection as wine? Not to mention flavourful. Every vintage brings several hundred products to select from and obsess over. Most collectors have their personal favourite producers, on top of the core handful which are mutually agreed by all as the ‘blue chip’ investment wines. And laid over this is the added dimension of the vintages themselves, dating back many decades, and even centuries in some exceptional cases. It’s hard to understate the power of a good vintage to spark adrenaline in wine collectors and investors.

And one last reason. Wine is more than the world’s most profitable passion asset; it’s also the most widely collected, and therefore one of the most stable. Win, win, win.

You get the picture. I think wine is a pretty excellent investment. If none of my points above have swayed you to my point of view, consider the following. If it all goes wrong, and the world pulls itself to pieces, as the warheads soar overhead and the bullets whizz past, would you rather sit in an antique chair counting down the seconds on an old watch, or would you rather pour and enjoy a glass of fantastic wine. Think about it. Happy Valentines Day.

Burgundy has produced an unprecedented string of excellent vintages during the last couple of decades.

2016 was the third in a trio of such vintages, which complement each other beautifully.

The intense 2016s tend to have an extremely focused core of fruit, and are threaded with acidity that infuses the vintage with notes of blood orange, redcurrants, cassis and spice.

2015 produced deep and richly expressive reds which are now beginning to close down, suggesting a long and glorious future. They are reminiscent of the 1999s with (in some cases) a touch more concentration.

The 2014 reds are very under-rated given how balanced, expressive and subtle they are, with sufficient stuffing to last the course. This is a vintage to satisfy the most ardent Burgundy lover through a very wide drinking window.

The 2014 whites are something else: a mythical vintage that every white Burgundy lover should own. While they didn’t show enormous typicity early on, that was precisely because they were so concentrated and bright. They are now evolving beautifully, with most endowed for the long-term.

2013 produced some excellent top-end reds, and very fine whites for those who like freshness and definition. Although a challenging vintage weather-wise, quality abounds at the top of the tree, among vignerons who respected quality and fought the filthy weather with heavy-handed use of secateurs. Roumier and Rousseau adore their 2013s.

Burgundy’s run of strong vintages began well before 2013, however. 2012, 2010, 2005, 2002 and 2001 all delivered great quality, and there are also some great wines (of both colours) to be had from 2008, 2007. Many 2006 wines are showing better and better as time passes, and the 2011s, which showed a certain hardness in youth, are softening into wines of substance. Once-maligned 2004 is even starting to develop now; the wines are gradually dropping those hard coal-tar flavours that were attributed to pyrazines from a ladybird plague, but which may well be simply a characteristic of a firm, robust vintage in the first 14 years of life: a late developer and an ugly duckling.

Success among the 2003s is very much dependent on producer; look for those who picked early, used refrigerated vans to protect their grapes from searing heat during transit, and employed light-touch winemaking. Great wines were made in 2003, and served blind can fool the drinker into imagining 2005, albeit with a little less structure.

The Burgundy market

Although Burgundy has had a great run of quality, the same is not true of quantity. Most vintages since 2009 have come up short, and 2016 was the worst of the lot, with some villages experiencing reductions of 70%.

Upward price pressure is the natural result of these smaller quantities, yet in context producers have showed admirable constraint; increases over the last 5 years are up by a ‘mere’ 94%. Contrast that with the 10-year picture, which shows price increases among the blue chips of 428%!

Further down the pecking order, back-vintages of Premier Crus have not caught up, except for the best-known blue chip producers.

The outlook for Grand Crus remains solid, in our view, in spite of the elevated prices. Nevertheless, traditional Burgundy buyers are trading down appellations in search of value, which will surely elevate Premier Cru prices over the next 24 months. There are plenty of excellent maturing or fully mature wines on the market, whose prices prove extremely attractive prices when compared with new releases – even more so if you factor in 10 years of storage fees and inflation. If you are interested in investigating, contact us to discuss the options, or check out the Burgundy offers on the fine wine exchange.

In days gone by, it took the best part of a decade for a hot new Burgundy producer to become recognised. But times have changed, with buyers more actively hunting out wines with a good quality/price ratio. These days, new discoveries rapidly increase in price over the first 4 to 5 years. Identifying these rising stars early is a great way of buying into Burgundy in a way which guarantees future returns should you choose not to drink everything you have purchased. You might end up with vintages that are ‘works in progress’ compared with more recent vintages, but you can always trade up.

Looking ahead, the 2017 wines will provide generously in both quantity and quality. Stylistically, the vintage will be more akin to 2014 than to the intense, concentrated wines of 2015 and 2016. Thankfully, the prospect of a good-sized campaign for the 2017s has kept 2016 prices in check; and just as well, given current price levels. How successful 2017 will be across the board remains to be seen.

Health

After the sharp price increases of 2016, when the Bordeaux market leapt as it rebounded off its 2014 lows following a couple of years of ticking up, 2017 was always going to be a less dramatic year for the classified and blue chip Bordeaux market.

It was encouraging to see a successful 2016 en primeur campaign that saw generally modest increases over 2015 in Euros, even if increases were more substantial for UK buyers due to the weakened currency. Overall gains in 2017 were low single-digit for
First Growths (after the 30% readjustment seen in the previous year). Other Classified growths and Right Banks rose an average of 7%.

Such moderation was less evident in the primary or secondary Burgundy market, the latter up 14.5%. What happens next is anyone’s guess, but the top of the market is holding onto 5-year gains of 100%, thanks in part to enduring Asian interest.

Hard luck stories

Burgundy was really hard hit by frosts in 2016. It’s a super vintage, but with many producer cellars that are 2/3rds empty. Only Vosne-Romanée and parts of Morey-St.-Denis and Gevrey-Chambertin escaped the April ‘gel’. Pretty much everywhere else was
heavily hit. The night-time freeze hit the Grand Crus and vineyards high up, the morning sun burned the buds of other premier crus and villages plots.

That big reduction in volume does add something to the intensity of the reds most noticeably. They are balanced, intensely redcurrant or blackcurrant in character, saline and fresh, with a vein of blood orange pulsing through them. The whites are fine
but don’t quite have the extraordinary rich, bright core of the 2014s, although in their favour the whites show more site specific character at this very early stage.

In 2017 Burgundy narrowly missed a second successive year of April misery, with an abundant vintage of good quality. Instead, Bordeaux was badly affected by freezing night-time temperatures in the last week of April, after a warm spring had encouraged
early growth. Some areas on the Right Bank, Graves and parts of the Medoc away from the warming waters of the Gironde were devastated. Chateaux de Fieuzel in Pessac isn’t making any wine in 2017.

What that will do to en primeur pricing next year remains to be seen, but widespread rises are on the cards, probably even those properties who emerged unscathed.

Notable winning regions

Champagne extended its run with top back vintages (where relative scarcity starts to play) racing ahead, up 13% in 2017. The world’s appetite for Champagne remains insatiable.

It was gratifying to see Northern Italy in rude health, with interest for Barolo Crus broadening significantly and prices of the best producers very sharply up this year on the back of a string of good vintages culminating in the highly sought after 2013s.

Speculation

Talking of that flash of speculation, Margaux 2015 announced in November that Margaux would release their 2015 as a special edition in honour of Paul Pontallier, the managing director of the estate who died in March 2016.

We saw the first release from the chateau, offered in individual single wooden cases, at a significant premium to the release price.

Based on the Chateau’s announcement, we saw speculative trading in the wine between EP club members rise and rise, with bids climbing from under £6,000 to £12,000, representing more than a 130% increase compared to the release price to UK consumers of
£4,650.

The limited edition black bottles with a variation on the classic Margaux label in gold invited comparison with the 2000 Mouton Rothschild, which attracts a significant market following based on collectability, despite not being in the top flight of Mouton
vintages or even one of the best wines of the vintage.

Looking ahead to 2018

If you're interested to learn more about the health of the fine wine market and are interested in our predictions for 2018, you can now download our Fine Wine Predictions 2018 report, a must-read for collectors, wine lovers looking for value, and investors searching for opportunities.

Although wine markets have generally appeared not to correlate with the global economy over the last decade, we would not be surprised if this has changed from 2016 onwards and for the next 5-10 years.

Look back in time to the recession of the early 1990s, the Asian Crisis of 1997, the dotcom bust following Y2K, and the Iraqi invasion of Kuwait in 2003; and you will see that all these events that negatively affected global sentiment and equity markets also affected the fine wine market.

Go back further to the oil crisis of the 1970s, and wine plunged then too. But that was a different epoch.

Whilst the fine wine market has further globalized and broadened since the mid 2000s, people are still people: with the same human response to economic positives and negatives; that in turn reflects in levels of investment, spending and so on.

The fact that this is a discussion at all is down to the banking crisis and what happened in the period 2009-2015. Initially as stock markets tanked, the wine market rose, then rocketed in line with commodities and safe haven assets such as gold bullion.

But it was counter-intuitive. The response of the Bordelais in April 2009 was rational, to cut release prices to levels not seen for several years.

This was largely due a discontinuous, one-off event, namely China’s rapid industrialization, and what that did to commodity prices. In our opinion this does not mean that fine wine correlates with commodities. Or gold. As variously has been posited. You could just as easily correlate corruption, grafting and the adoption of fine wine as an alternative store of value for various indirect purposes within China during that period.

Wine is not a commodity. It happens to be one of the most commodity-like luxury collectibles, but that is not the same thing.

Wine is not a safe haven asset like gold bullion. When the world goes south wine warehouses do not fill up.

The basic question is whether wine is a hedge against the economic cycle? Historically it wasn’t. Recently it appeared to be but discontinuities are just that, so it’s not a reliable period upon which to form an opinion. Is the broader base upon which we now sit a game changer, where the laws of supply and demand, and the effect upon that of greater consumption, take over?

Scarcity has relentlessly driven Burgundy and cult Californians to new undreamt of heights, with top Baroli in hot pursuit. Will relative scarcity do the same for Bordeaux, or has the global base broadened at the same time as traditional markets, USA included, have shrunk?

And irrespective of all of the above, will the market continue to punish excessive pricing when things get out of hand?

The Don, St Swithins Lane, London, a converted wine warehouse, was the venue for one of Wine Owners tasting evenings offered to its members – Trial and Terroir Dinner based upon the 2011 Bordeaux vintage. The evening was conducted in one of the Don’s private rooms with an earthy dinner by head chef Frederick Forster.

Lionel Dougnac, buying director for De Luze & Fils, one of Bordeaux’s most influential negotiants, helped us navigate the properties surrounding the waters of the Gironde estuary. Lionel has been in the Bordeaux trade for over 20 years, specialising in buying classified growths. He has also worked for the top barrel-maker in France. Oaking became an interesting discussion point half way through the evening.

The focus for the evening was to explore the concept of terroir through the different wines presented during the evening from the 2011 vintage in Bordeaux. A vintage which left many enthusiasts wondering if the so-called ‘harlequin’ year could justify its high prices at primeur. Not surprisingly, there was immediately an exchange over what terroir might mean and during the evening there was plenty of opportunity to plumb the depths of this compelling subject. Lionel was quick to point out that, in his view, terroir was not just about the weather and soils but also included other factors, and even the ambitions of the domain owner.

2011: for those that might have forgotten, it was an unusual year by any standard. The year started with a massive water deficiency in the vineyards, and an unusually warm and protracted Spring. This meant that the vines were well in advance over the average year. Average temperatures during this period were close to if not in excess of any records previously recorded. It culminated in two extremely hot days in June where the temperature exceed 40°C. Some exposed bunches of grapes, especially on gravel soils, were scorched and losses were considerable, as much as 20% of the crop in some instances. If vignerons were concerned that any continuation of the drought would decimate whatever crop remained they needn’t have worried as damp, cool weather set in for much of July, followed by a very hot August. The heat precipitated some substantial downbursts and overall precipitation was above average for the period. An Indian summer followed which provided optimum conditions for the harvest in September. A series of circumstances which profited the white wines of the region but the red wines were heterogeneous.

L’Evangile vs Vieux Château Certan: the expression of the two first wines on offer provided an interesting contrast. The owners at VCC, the Thienpont family since 1924, have always worn their heart on their sleeve combined with an increasingly obsessive focus on managing the vineyard at a micro level of geography – and an ambition to let the terroir speak for itself using minimum intervention in the wine making. L’Evangile, now wholly owned by Domaines Barons de Rothschild since 1999 (they had earlier acquired a majority a shareholding) is a neighbour from ‘Haut-Pomerol’ with an ambition to become one of the top Pomerol estates. The latter’s substantially higher Merlot in the blend offered a very round and pleasing profile – a whopping 94%, leaving little room for their Cabernet Franc. It was very elegant and restrained which contrasted with the beautifully defined structure of VCC. There were pleasing elements in both wines. Interestingly, guests were not to be tempted by the more voluptuous offer and unanimously preferred the ‘aesthetic values’ expressed in Vieux Château Certan 2011.

In Pessac, the contrast was even more stark. Haut-Bailly, as always, attractive and feminine, seduced much of the company with its approachable elegance based on a more merlotised style than usual - a statistical recognition, if nothing else, that its Cabernet Sauvignon suffered that year. The Cabernet Franc, already on the way out at the domain, hardly got more than a top-up role. Haut-Bailly have always acknowledged that their terroir has issues under dry conditions such as those experienced in 2011. La Mission Haut-Brion was altogether more muscular and intense. It possessed a complex tension which will be years in its evolution. Lionel had obviously selected the wines he felt would give us more to ponder. We digressed into a conversation about how artists’ materials are perhaps the elements of physical terroir; that artistic genius is the inspiration, imagination and ambition of an estate’s terroir interpreted by the owner. Whatever the canvas that year, Wine Owners terroirists’ marginally preferred the more ‘traditional’ yet polished properties expressed in the intense muscularity of La Mission Haut-Brion 2011.

The grand estates of Pauillac were represented by Pontet-Canet and Château Pichon-Longueville Baron. This gave us an opportunity to discuss the influence of biodynamic viticulture in the region and its impact on the wines of Pontet-Canet. Clearly something had separated the processes of these two estates which are largely comparable in terms of size and varieties. When it came down to it, Pichon Baron managed 82% Cabernet Sauvignon in their blend, whilst Pontet-Canet a mere 60%. Yields were disparate too – 39% in the case of Pichon Baron whilst at Pontet-Canet it was 32%. It’s worth just quoting from the specification sheet of Pichon-Baron 2011 to understand properly the enormous lengths châteaux had to go to preserve the quality in the bottle:

“Bespoke grape picking: the grapes were picked and brought in the vat-house plot by plot, in order of maturity, with particular attention to selection on the plots. Sorting in the vat-house was highly meticulous [their bold] keeping only the very best grapes. The grapes were sorted twice, both before and after de-stemming. Once de-stemmed, the selection of the grapes was fine tuned on two sorting lines, one manual and one using optic systems.”

This extensive and costly work appears to have been justified as the assembled company substantially preferred this wine. Perhaps the more laissez-faire practices of biodynamics don’t favour complicated years albeit it may be a more ‘authentic’ product.

Our final flight of the evening ended with a cheese plate and perhaps two of the most interesting wines of the evening – Chateaux Montrose and Calon-Ségur. Both estates in their own ways have seen major upheavals over the last 5-10 years. One could even be forgiven for thinking that terroir might the servant of the ambition of the two new owners. Certainly, the Bouygues have invested colossal sums in an estate which they were always destined to own. The recent vintages have all demonstrated that their terroir has justified the trust of its billionaire owners producing wonderful wines in supposedly less good vintages. 2011 was no exception. Montrose’s enhanced ‘environmental responsibility’ which the Bouygues have brought to the estate extends the work of one of its founders, Mathieu Dollfus, who established a programme of social care for his workers building them free housing in the ‘Montrose village’, included them in profit sharing and even offered free health care – making ‘unique contributions to the community’ of Saint-Estèphe. The windmill which stands on the property is a ‘symbol’ of his tenure and his fight against phylloxera – the windmill drew up water which flooded the vineyards – a practice which had some success in reducing the disease at the time. At Calon-Ségur, despite the death of its owner at harvest time, pulled off a stunning wine - contradicting received wisdom about yields (the estate had one of the largest yields of all the wines tasted) and demonstrated that even in turbulent times estates can pull something out of a hat. Triumph in adversity is part of the story of Bordeaux. Opinion was equally divided on their relative merits.

Lionel’s deft commentary on the wines permitted discussions on all other matters of interest to the guests. This wasn’t just a working evening – although there was much to delve into.

The evening conversation turned to a brief but informative discussion about the commercial prospects of ‘La Place’, advantages or otherwise of buying en primeur and discussions on some practices of specific châteaux to release wines as ‘library’ wines after primeur campaigns - subjects which Lionel was uniquely qualified to explain.

For those still with the will to carry on tasting there was ample opportunity with additional samples as backup. Overall, the unscientific assessment was that there were 3 stand-out wines – La Mission Haut-Brion 2011, Montrose 2011 and Vieux Château Certan 2011.

Broader definitions of terroir escape the confines of the tightly worded official description. The Australian economist David Throsby outlined the concept of a ‘cultural good’ (in his seminal book Economics and Culture, 2001) which might fit better to the breadth of considerations Lionel managed to convey during the evening. Throsby’s thesis is that a person’s preference for something would be based upon the characteristics of the good which contribute to its cultural value. Some of these are highlighted above in quotes but, in summary, they include aesthetic properties eg elegance and balance; spiritual value – emotional and inspirational attachment; environmental which includes PDO (L’Appellation d’origine protégée) and environmental responsibility; historical – evolution and tradition; symbolic, such as the name of ‘Bordeaux’ itself and what it inspires and among others one might conjure; and authenticity which is embodied in the unique character of a wine drawn from the local area where it is produced.

The WineOwners Trial and Terroir Dinner managed to elucidate these concepts and more.

What a treat to welcome Matthieu Bordes to a Lagrange dinner in London, with a full house of Wine Owners’ enthusiasts around the table.

Matthieu was subsequently described by one member in attendance as ‘informative, congenial and charming’. His passion for Lagrange shone through. Matthieu is both boss (Directeur Générale) and the wine maker since 2013, the year that extensive modernisations were also made to their wine-making facilities.

Chateau Lagrange is an unmorcelated parcel to the west of the commune of St Julien, classified as a 3rd Growth in 1855. Owned by Japanese beverage giant Suntory, it’s very much run with a free hand by the local management team.

Arums de Lagrange 2016

The tasting kicked off with the estate’s white wine, Les Arums de Lagrange 2016, comprising sauvignon blanc, semillon and a dollop of muscadelle. Arum is a form of hardy lily, and the name is aptly chosen. Les Arums is delightful with a delicate nose and very attractive purity. There’s no trace no heaviness, nor any overt cépage character, due to the gentle handling of the fruit and a balance between barrel fermentation and a period of élevage in steel. It’s drinking beautifully already: there’s clarity to the fruit underpinned by appealing freshness. No need for a Coravin with this one; it’s too tempting to drink the whole bottle!

Chateau Lagrange 2015

A fitting guard of honour for the 2016 vintage that followed. There’s a benchmark cedar nose, with warm and inviting fruit. The initial impression on the nose is of a lush wine, yet the attack is firm, and the fruit is beautifully pure – crystalline. There’s impressive intensity, but at present without the sense of coiled energy of the greatest vintages. Nevertheless this will drink well moderately young, with its warm and inviting nature unlikely to turn taciturn. Very impressive given it had only recently been bottled, a time when wines can pass through an unsociable teenage phase. We wouldn’t be surprised if this gained much more length with time.

Chateau Lagrange 2016

Unsurprisingly with a barrel sample, the nose is on the 2016 is un-evolved, with primary, juicy fruit to the fore. The initial impression at first sip is that the wine is elegant and of medium weight, with a mild savoury streak adding interest. This is an insinuating wine though, whose accomplishments and embellishments become apparent progressively with time in the glass. The tannins are so ripe and silky that their velvety texture cloaks a very considerable underlying structure to the fruit. IPT levels were rather high within the best sectors in 2016, essentially a measure of tannin and colorant from skins, pips and vegetal matter. That substance is very much in evidence chez Lagrange, with a delightful balance that suggests great class. Magnificent.

Chateau Lagrange 2005

We’ve always been fans of those 2005s where the wine making wasn’t unduly extracted, and this Lagrange ticks that box. There’s a dusting of white pepper on the nose, with a blast of kirsch and liquorice. The attack is sweetly fruited, with black ripe cherry dominating the mid palate, and a liqueur-like texture. The finish is heady and visceral. A soulful wine, and very well balanced too. Destined to drink sooner than some other 2005s but with the wherewithal to sustain a long drinking window.

Chateau Lagrange 2009

The nose is extremely fruity yet somehow delivers an impression of being very well integrated. There is enormous intensity to the 2009, with cloves, liquorice, chocolate and blackcurrants, wrapped up in a beautiful texture. The ripeness of the tannins is defining, providing a structure and focus to a bold wine. 27% Merlot, 63% Cabernet Sauvignon. This will need a number of years to properly resolve, by which time the evidently exotic bouquet and textured palate should ensure it develops into a wine reminiscent of 1982 St Juliens.

Chateau Lagrange 1996

Shifting away from young wines with a long life ahead, the 1996 surprised with its maturity. The nose is gamey, with leather notes, and savoury aromatics of smoked meat and sweet wood scents. On the palate there’s a satisfying depth to the wine, in common with other successful 1996s, yet with less noticeable acidity at this stage of evolution than many other top crus classés. Cloves, liquorice and blond tobacco dominate the mid palate before an attractive finish. The freshness of the vintage is seamlessly resolved into the whole. There’s a significant 7% of Petit Verdot in the blend that salt and peppers the 57% Cabernet Sauvignon and 27% Merlot. This is a success offering good value drinking now. If you haven’t already decided on the wine to serve with the Turkey, duck or goose this Christmas, look no further.

The first of 3 dinners to taste through 61 red Bordeaux ‘Growths’ classified in 1855, the 2007 vintage had been kindly provided by 2 wine enthusiast brothers who were keen to share this extensive horizontal with fellow members.

The wines were cleverly organised into suitable flights to accompany each dinner course by Christopher Delalonde, resident Master Sommelier at The Don on St Swithins Lane, ensuring a peak was hit with the glorious venison main course, with further high spots to be enjoyed in the tail-end of supporting wines.

Christopher Delalonde

Given the less than enthusiastic press on the 2007 vintage, the wines showed a remarkable degree of consistency. 2007 was not a vintage to try to force, and the great successes at all levels of affordability and rank were those founded on balance and the natural aromatics of the vintage. Whilst bargains are far and few between, some of the lesser known Crus still represent good value for money. At the top end, the Firsts and most of the Seconds showed their class and the value of their top terroirs.

Cool nose, spiced and generously perfumed. Savoury with with a saline element, and a texture reflecting fine, grainy tannins on the already resolved attack. Lifted, sappy, fruity mid palate and a finish that ends on a sweet crescendo. Delicious already, with plenty of future potential, and avoiding the overextraction of 2009/2010 vintages.

95

Prieuré Lichine, Margaux, 4th

Cool, spiced nose with trademark Margaux perfume. Savoury attack and mid palate, with a blast of licorice. A little obvious and currently a disjointed finish. Mid weight, but this might just be a bit young and yet come together.

88

Pouget, Margaux, 5th

First time I've ever tasted this Cru? That I can recall. Lovely, sappy nose: a sense of freshness and vitality. Fruity, rounded attack with the dry character of the fruit lending firmness. Mid weight mid palate, with an intriguing orange zest twist to the finish. Balanced and attractive. One to seek out at a bargain price as a household staple for Sunday lunch, given it's anonymity (and relative lack of buyer interest) in the market?

91

La Lagune, Haut Médoc, 3rd

Perfumed nose betraying it's proximity to Margaux to the North and close to La Garonne. Energetic attack, meaty notes, and lightly spiced blend to create a strong appeal. Only a medium length finish lets it down, but still lots to like.

90+

Pedesclaux, Pauillac, 5th

Pre the recent renaissance under Lorenzetti, who since 2009 bought 12 hectares next to Lafite and Mouton to enlarge and improve this forgotten Cru. It needed rescuing based on this showing: Licorice infused nose, slightly bright point of attack, nice density but with a bright acidity that isn't integrated and overall paraxodically shows as rather neutral.

86

Dauzac, Margaux, 5th

Spiced nose, savoury and round. Rather dull and flat in character. Recalls the edgeless wine recipes made by producers for Naked Wine. Think Barry Manilow (unless you like Barry Manilow in which case think of someone else).

84

Chateau Batailley, Pauillac, 5th

White pepper seasoned nose, griottes and cedar. Attractive cedary attack too with enough acidity to be mouthwatering. Firm, classic claret with enough cut to accompany the foie gras. Being picky, the mid palate came across as hollow on this showing.

88+

Desmirail, Margaux, 3rd

Quite a neutral nose, on its reserve. Restrained. But the texture shows grainy tannins, offers an elegant intepretation of the appellation, and shows good persistence. The mid palate is dominated by its savoury character at present. Given it was part of the vast Rauzan estate in olden times (together with Rauzan Segla and Gassies), it probably should be offering more than is evident today.

88

Haut Brion, Pessac, 1st

Liquor-like aromas intermingle with perfume on the nose. There's a stunning, illuminated attack with crystalline red fruit predominating. Superb energy driving into the long, long finish. Primary for now, this is not yet showing any of the unique Haut Brion Graves character one might expect, of charcoal, smoke and stoney minerality. It will come in time - give it 15+ years. Demonstrating once again how good Haut Brion is in off-years (or average years to give 2007 its dues).

96

La Tour Carnet, Haut-Medoc, 4th

As ambitious as its master, Bernard-Magrez, this is a big wine. A liquory nose leads you in, where the palate is rich, with confit fruit leavened with cedar. Modern but nevertheless quite impressive, it offers value and should settle down with age into a gentler form with a little more refinement. Very recent vintages have pulled back are are a bit more restrained.

89

Pichon Baron, Pauillac, 2nd

Very creamy nose, anis seeds adding aromatic complexity to the dominant oak influence. Huge cedary attack., sweet fruited mid palate, where the spice and licorice kicks in. Creamy oak influence evident here too. Impressive in its style, but I personally would have preferred more elegance for a Super Second. Yet it's young, needs time, and is an engaging wine for those who are attracted to its powerful form.

92+

Calon Ségur, St Estephe, 3rd

Always a 'giving' Cru with a good dose of Merlot, the nose immediately shows off its fruit, which is shot through with graphite. Nice intensity to the attack, creamy yet balanced, with an underlying exuberance that's contained. Medium length to the finish which ends a little flat. The ending lets the whole down for now, but may well gain in energy and interest with age.

92+

D'Issan, Margaux, 3rd

Another estate owned by Lorenzetti, who has been making improvements here for longer than at Pedesclaux. Fruity nose, with gamey notes and a trademark D'Issan salinity. There's a super energy to the mid-palate, fruity then savoury and with great progression. Super-fresh, bright acidity is well integrated into the fruit, and is unforced in its style though I'd prefer a touch more finesse. This should develop very well with time, and should make finer old bones.

92

Lafite, Pauillac 1st

Creamy nose, black pepper, but very much on its reserve. Superb intensity and an aromatic, floral quality to the fruit. This is defined at this stage of its evolution by refined tannins, is very persistent on the palate and leads into a rich, confit lemon finish. Stunning but terribly young for now. Should be magnificant in 10-20 years.

96+

Beychevelle, St Julien, 4th

White pepper nose, a fine attack and a round mid palate, nicely integrated but a bit simple overall. For the cash, one expects more.

88

Kirwan, Margaux, 3rd

Perfumed nose, confit, sticky fruit on a rich attack leading to a thickly textured, disjointed mid-palate. I can't help feel it would be a lot more interesting if it followed the less interventionist approach of D'Issan. Disappointing.

88

Grand Puy Ducasse, Pauillac, 5th

Perfumed nose, licorice notes, Firm attack, medium weight fruity mid palate with the right amount of freshness to lend lift and definition, and a citric thread driving the finish. Surprisingly good. Perhaps we're so used to the excellence and consistency of Grand Puy Lacoste we're overlooked a 'value' Growth here?

Cedar and saline nose with a dash of perfume that adds complexity. Smooth entry, svelte fruit on the palate, giving the impression overall of a very polished wine. It's quite possible this is less mute on the palate than was my impression, and that the reserved nature of the fruit augurs well for the future. Somewhat worse for wear by this end point, the note was correspondingly short!

After a busy summer including in August our most productive trading month to date, we thought it would be instructive to run some analysis of trading trends and movements, compared to the same quarter in 2016.

Market share between regions remains relatively stable despite a large increase in trading value overall, with Bordeaux holding first place with a 75.14% share of market compared to 78.15% in the same quarter of 2016. That there is a drop is interesting in its own right, perhaps pointing to greater diversity in wines offered for sale, as well as to diversifying demand in export markets.

Burgundy is the major winner in market share, extending from 11.78% in summer 2016 to 17.10% over the same period in 2017, and we’ve certainly seen an increase in Burgundy purchases from Far East markets, showing a 17% increase on 2016 numbers by value.

Other regions remain very much minority sports, with Rhone up to 2.03% from 1.8% and Italy, surprisingly, down from 4.85% to 2.5%.

Within Bordeaux, the share of the market taken up by First Growths has grown from 28.26% in 2016 to 44.05%, perhaps reflecting heightened interest in the top wines, though the real interest is in how the First Growths compare within their own category.

Haut Brion is the major winner amongst the Firsts, increasing its share of the Bordeaux market to 13.35% from 3.2%. As a proportion of the First Growth market, the share increased from11.31% to 30.3%, putting Haut Brion at the head of the market alongside Lafite.

Lafite moved up to a 13.34% share of the Bordeaux market from 11.62%, but lost ground against the other First Growths, slipping to 30.29% from 41.12%, exchanging a clear lead in the class for an almost dead heat with the progressive Haut Brion.

Mouton showed a similar fall-off in share, dropping from an 8.63% share of Bordeaux to 7%, and a 30.54% share of the First Growth market dropping to a 15.89% share. Market and trading values for Lafite and Mouton remain robust however, so this feels more like a positive story about Haut Brion than a negative for the two Rothschild properties.

Latour has benefited too here, growing a very small share of Bordeaux (1.18%) to 5.07%, and increasing its share of the First Growth market from 4.18% to 11.05%.

Margaux has the least movement to comment on, increasing its share of the Bordeaux market marginally to 5.29% from 3.6%, and falling from 12.84% to 12.01% in its share of the First Growths.

Caroline Decoster: It’s a little bit sad to start this interview by a regret, but I have to say that we lost 95% of our vineyard in one night last April. It was heartbreaking. We’ve already invested in new machines, called Frostguards, for the end of the year, that will prevent us for this kind of catastrophe, but our main regret is not to have had them before.

WO: In what ways have your wine making changed over the last 10 years.

CD: The global warming has affected our wine making. We are located in the coolest part of the appellation of Saint-Emilion, which means that we have a late ripening terroir. Ripening the berries over the past decades could had been difficult in this part of Saint-Emilion, because of the lower temperatures during October - which is the moment of the year when we usually harvest. But nowadays, due to this global warming, we can benefit from Indian summers year after year, to reach the optimal ripeness effortlessly.

WO: What vintage are you proudest of?

CD: It’s very easy to be proud of a successful vintage. Like in 2010 and 2015, the wine growers were most of all very lucky, thanks to good conditions all year long. But in difficult vintages, all the right decisions that we took in tough moments were decisive to make a good wine in the end. Like in 2014 and 2016 : after months of rain and cold temperatures, the sun came back at the end of the summer, and everybody was so excited to finally have good conditions of ripening, that some vineyards completely de-leafe the bunches, which could be a mistake in some cases: the weeks after that we’d had the hottest temperatures for September since 50 years. We did not de-leafe completely, because we were sure that everything could still happen, and it was the right decision to take.

WO: If you had to define your wines/domaine in one sentence?

CD: Lots of wine owners will say how passionate they are about their wines : but we believe that passion can isolate you and make you blind. That’s why we rather prefer to talk about the « enthusiasm » that we have for our life, a positive and dynamic way of life that we want to share in each glass of Fleur Cardinale, with a lively fruit, and wine with a great energy.

WO: Tell us about your terroir & microclimate, and your approach to winemaking.

CD: The vineyard is located at the east of Saint-Emilion, on one of the highest points of the appellation, and is planted on clay-limestone soil in the middle of the hillsides. The planting is 75% Merlot with 20% Cabernet Franc and 5% Cabernet Sauvignon. Our aim, vintage after vintage, is to preserve the freshness of the fruit in the glass.

In terms of viticulture, it means for instance that we want each vine to be very healthy, and to express the full potential from its terroir. This year, we’ve been certified High Environmental Value (HEV). This certification is the highest level of a generalised scheme for the environmental certification of farms. It guarantees that the presence of factors of biodiversity (hedges, grass strips, trees, flowers, insects, etc.) is very widespread on our vineyard and that the pressure applied to the environment by our practices (on air, water, soil, climate, biodiversity and landscape) is kept to a minimum.

In terms of vinification, it means that the ageing time in barrels is perfectly well-managed : The wine is aged for 12-14 month maximum, in new French oak barrels. Our coopers provide us with barrels produced exclusively from wood of the 3 most qualitative French forests. A Burgundy toast has been adopted for all our barrels: this kind of toast is realized at a moderate high heat and for an extended period of time, so as to preserve the purity of the fruit and the silky touch of the tannins.

Thank you so much to Caroline for taking the time to answer our questions. All our best wishes to the entire team at Fleur Cardinale!

Early afternoon 22 May 2017 word spread that Lafite was out. A few calls were made. But where was the wine? Allocations were down 50% but with the promise of another tranche in a couple of weeks’ time. Négociants waited, not wishing to be stuck with more highly priced second tranche releases.

In tandem the Chateau also attempted to revive its 2010 vintage strategy of tying other wines in the stable to allocations of Carruades and le Grand Vin. Either Rieussec and Carmes de Rieussec were being tied to Carruades, or Carruades was being tied with Duhart, or Duhart was being tied with Lafite.

As an aside, there was nothing subpar with Duhart this year, a properly serious wine in fact. But using it in a bait-and-switch move is unlikely to enhance the bait’s secondary market reputation.

Then, without waiting for the second tranche, more than one of the smaller négociants broke ranks on releasing the first tranche to customers, but estimating the cost of the second tranche and pricing at the intersect of the two. With lack of market transparency buyers were uncertain what fair value might look like.

In fact the majority of estimated intersect prices turned out to be the level of the second release price, handing merchants a handy profit of 20%, and suggesting Lafite were less aggressive with their second release pricing than they had previously signposted.

Thankfully, Lafite 2016 represents a big step up on the previous vintage, so the price increase will likely be justified in the medium term, if as expected, the secondary market adds 25% to its release price over the next few years. In fact Lafite 2016 is simply glorious: an absolute pinnacle of classicism in this great left bank vintage.

Notwithstanding, the Lafite release ‘strategy’ represents everything that is most unattractive about Bordeaux en primeur at its opaque worst.

None of which would matter, if it weren’t for the consumer. It wasn’t so long ago that the Bordeaux market was moribund: the market killed off by aggressive pricing of 2009 and 2010 vintages and a subsequent market collapse. As long as consumers end up nursing persistent losses, there is a high risk of a collapse in market confidence. Commodity-like collectible markets that wine epitomises are particularly sensitive to the maintenance of positive sentiment.

We’re certainly not back in territory as yet. Lafite 2016 released at almost 50% below that of 2010, whilst for UK buyers the collapse of Sterling has magnified price increases, whereas the strength of the US Dollar provides a tailwind for Bordeaux sales into the USA.

But the Bordelais need to be mindful of what happened following the mis-priced 2010 release. Lest we forget, it was barely 3 years ago that the Bordeaux secondary market was still in the doldrums. The remarkable market resurgence that started in late 2014 should not be taken for granted. The Chateaux have a profound responsibility to avoid the Dory Syndrome, named after the forgetful fish in the Disney film animation.

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